Standard Life owner Phoenix Group hails 'very strong' first half despite economic woes
Phoenix Group, the insurer that acquired the Edinburgh-headquartered Standard Life Assurance business in 2018, have said the firm performed “very strongly” over the first half of 2022 despite a challenging economic backdrop.
The life insurance and savings group said it was confident about its outlook for the rest of the year after cash generation increased by 8.9 per cent to a record £950 million over the six months to June, compared with the same period last year.
It told shareholders that it expects cash generation to be at the top end of its target range of £1.3 billion to £1.4bn for the whole of 2022.
Phoenix said this was buoyed by new business, with cash generated by new clients more than doubling to £430m over the half year.
The update comes a week after the group continued its recent acquisition spree with a £248m takeover of Sun Life UK.
Phoenix upped its interim dividend by 3 per cent to 24.8p per share as it unveiled its half-year results.
The firm also said it had commenced the migration of £15bn of pension assets and 1.5 million members to Standard Life’s flagship sustainable fund.
Phoenix Group chief executive Andy Briggs said: “Phoenix has performed very strongly in the first half of the year despite the challenging macro environment. We have once again delivered a record set of financial results, which was underpinned by the strong progress we have made across our strategic priorities.
“We have delivered strong cash generation of £950m and maintained our resilient balance sheet. We have also delivered both organic growth, with £430m of new business from our Open business, and inorganic growth, with the announcement of our £248m acquisition of Sun Life of Canada UK.”
He added: “We have been working tirelessly to ensure we can support our customers and colleagues impacted by the increased cost of living - building on our programme of activities for our most vulnerable customers and offering a range of support to our colleagues including a one-off payment. As the UK’s largest long-term savings and retirement business, we are driven by our core social purpose.”
Steve Clayton, fund manager at Hargreaves Lansdown’s HL Select, noted: “These are a solid set of numbers from Phoenix that show the company executing well against all of their key targets. Cash generation is up and acquisitions have delivered their synergy expectations. The group have cash surplus and capital, so expect further acquisitions down the line.
“The business hedges risks to the maximum extent possible and saw little impact when markets tumbled in the first half. Crucially, Phoenix say this morning that they have almost no exposure to inflation, having hedged out their costs and product exposures.
“No doubt analysts will quiz them later on how long this hedging will run for. But right now, that protection from rising costs puts Phoenix in an enviable position relative to most UK companies.”
He added: “The group is writing significant and growing new business volumes, showing how far it has come from just consolidating and running-down old closed-book life companies.”